RachelKoning Beals

Gold futures finished higher Thursday for the first time in four sessions, maintaining an overnight post-Federal Reserve statement advance that lifted the precious metal from a two-month low.

The contract added to earlier gains after a flurry of data early Thursday did little to shift the market’s view of an improving U.S. economy and go-slow Fed policy.

The central bank on Wednesday kept a key U.S. interest rate steady, saying that inflation is likely to run near the central bank’s 2% annual target in the coming months. The Fed didn’t do anything to dispel market expectations that it will lift interest rates for a seventh time since the end of 2015 possibly as soon as next month, as it aims to normalize monetary policy.

Still, there is little sign of alarm at the Fed that could push the panel to move more aggressively than what it is already indicated—raising rates three times in total this year. That stance depressed the dollar, to the benefit of gold.

Post-Fed, “I see gold solidifying and not selling off further this week with ‘medium term’ inflation expectations in FOMC statement” driving that sentiment, said Jeff Wright, executive vice president at Gold Mining Inc.

June gold
US:GCM8
rose $7.10, or 0.5%, to settle at $1,312.70 an ounce. It had also climbed above $1,310 in after-hours action as traders digested the Fed statement. Gold had ended lower for a third straight session Wednesday, at $1,305.60—the lowest since March 1.

Gold edged higher as the ICE U.S. Dollar Index
DXY, -0.04%
which measures the buck against a basket of six currencies, fell by less than 0.1% at 92.45. The index on Wednesday rose 0.1% and hit its highest level since late December during the session.

The 10-year Treasury note yield
TMUBMUSD10Y, +0.00%
fell 2.2 basis points to 2.943%. The closely watched yield has struggled to hold above the 3% line it hit late last month. Higher Treasury yields can spell weakness for gold, which, like other commodities, offers no yield.

Monthly U.S. nonfarm payrolls data, due for release Friday, “will be key for gold heading into next week,” said Wright. Analysts expect to see a rise in nonfarm payrolls for April.

On the demand side, overall global gold buying fell to its lowest first-quarter level since 2008, driven by a slump in demand for gold bars and exchange-traded funds backed by the precious metal, according to a report from the World Gold Council released Thursday.

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